Docomo buys 20% interest in China's Baidu platform

Krystal Peak · July 13, 2012 · Short URL:

The Japanese mobile operator follows global opportunities, first in India, Italy, now China

After a year of talks, a mobile content partnership between NTT Docomo and China’s search giant Baidu have finally joined forces and according to a company announcement, NTT Docomo has secured a $22.5 million investment and now is a 20% shareholder in a new mobile content distribution platform. Baidu retains the remaining 80%. 

The duo has also announced that the first apps to come out of this partnership will be localized versions of games from Japan’s DeNA for a Chinese audience. The launch of those app is slated for August.

With similar strength and exposure to Google, Baidu maintains a market share in China of 80% and is heavy supported by advertising.  

Like many countries outside the the US and Western Europe, the focus on mobile growth is immense for Baidu because technology is leaping more than evolving in China. Many people that never had cable or home Internet are now connecting at a rapid rate via their mobile and smartphones. The growth in the Chinese mobile market is far outpacing growth in fixed broadband, now with more than a  billion mobile subscribers, and the biggest smartphone market in the world. 

In order to leverage this new, and rapidly growing market, Baidu has created its own Android OS, worked with iOS and is developing for Window Phone.

Docomo, in Japan, is a mobile industry leader that has hopes to expand beyond the limits of its country and use this joint venture to bring Chinese consumers to the cutting edge of tech like the Japanese have been for years (usually outpacing the U.S. and Europe).

The Japanese company announced plans to spend nearly $300 million to buy an Italian mobile content provider earlier this year, Buongiorno, but detail and finality have not come on that deal just yet. The company stated this week that the deal could be closed by July 18.

In India, Docomo owns 26% of Tata Teleservices, the sixth-largest carrier by subscribers as of this year.

Docomo, which controls 47% of the wireless market in Japan, has been trying to compete aggressively with the iPhone and has stated that it will introduce 16 smartphone models including Samsung Electronics Co.’s Galaxy series by August. 

Docomo had cash and near cash of 522 billion yen as of March 31, down 32% from a year earlier and will probably have a net addition of 2.8 million subscribers in the current 12-month period, compared with growth of 2.28 million the preceding year, it projected on April 27.

Net income in the year started April 1 will rise 20% to 557 billion yen as sales increase 5% to 4.45 trillion yen, the company forecast in April, citing higher data transmission fees and handset sales.

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